Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly-owned subsidiary of the Reserve Bank of India (RBI), has issued a global Expression of Interest for Biaxially Oriented Polypropylene (BOPP) substrate sheets with embedded security features. A pilot is expected to begin with Rs 10 and Rs 20 notes, nearly 15 years after the first pilot was announced.
The revival raises the question of whether longer-lasting, harder-to-forge notes justify higher production costs and import exposure, when digital payments are growing but cash demand is not falling.
Polymer notes use a BOPP substrate, unlike Indian currency, which is made of 100% cotton-pulp paper. They are water-resistant and tear-resistant, and carry transparent windows, micro-printing, holographic elements and embedded security features that make counterfeiting harder. Australia introduced the first full polymer series in 1988. More than 60 countries, including the UK, Canada, New Zealand, Singapore, Malaysia and Vietnam, use polymer notes fully or partly. They generally last 2.5-4 times longer than paper notes.
In India, the RBI proposed in 2009 to print 100 crore Rs 10 polymer notes. The 2012 pilot approval for Kochi, Mysuru, Jaipur, Bhubaneswar and Shimla chose these cities for their diverse climatic conditions. In 2014-15 the RBI reported technical infirmities during evaluation and the project stalled. Demonetisation in 2016 then shifted priorities towards printing new banknote series.
BRBNMPL was set up in 1995 under the Companies Act and is headquartered in Bengaluru. It runs presses at Mysuru, operational since 1996, and Salboni in West Bengal, operational since 2000.
India spends nearly Rs 5,000 crore a year on replacing damaged and soiled currency and on printing and managing notes. About 20-24 billion soiled notes are destroyed or replaced each year under the Clean Note Policy (1999), which the RBI announced to keep good-quality notes in circulation and withdraw soiled and mutilated ones. Low denominations such as Rs 10 and Rs 20 deteriorate fastest because they circulate most often.
Counterfeiting is another factor. RBI data indicate that counterfeit notes detected rose to around 2.3 lakh pieces in 2025-26. RBI Annual Reports put the cost of currency printing at Rs 5,101 crore in 2023-24, Rs 6,373 crore in 2024-25 and Rs 4,875 crore in 2025-26.
Proponents argue that the higher manufacturing cost is offset by fewer replacement cycles, and so less printing, transport, storage and destruction of soiled notes. A TERI Life Cycle Impact Assessment commissioned by the RBI found that polymer notes have a higher initial carbon footprint but a lower overall lifecycle footprint, because fewer notes need to be made and moved.
Polymer notes cost 30-60% more to make than paper notes. In some countries, production costs for low-denomination notes reach 20-24% of face value, which raises questions of cost-effectiveness.
The substrate is made from polypropylene, so costs are exposed to crude oil prices, geopolitical tensions and supply disruptions in West Asia. India imports nearly one-fifth of its polypropylene requirement. Reliance Industries and Indian Oil Corporation are scaling up domestic capacity, but import dependence remains a strategic concern.
ATMs, currency sorting machines, vending machines and banknote processing equipment would need recalibration, and banks, retailers and cash logistics firms would face adaptation costs. India has also invested heavily in paper currency infrastructure, including Bank Note Paper Mill India Pvt. Ltd and indigenous ink manufacturing, which a sudden shift could leave under-utilised. Plastic waste and the need for specialised recycling facilities are the environmental concerns.
The Unified Payments Interface (UPI) processes over 24,000 crore transactions a year and accounts for around 85% of retail digital payments. Yet currency in circulation has grown from around Rs 16-17 lakh crore a decade ago to over Rs 41 lakh crore in 2025-26, and the currency-to-GDP ratio remains above 11%. This is described as the RBI's currency demand paradox.
Cash remains essential for the informal economy, rural and remote areas with limited connectivity, small merchants and street vendors, household and precautionary holdings, and emergencies such as disasters, power outages or network failures. Digital payments and cash are therefore complements rather than perfect substitutes.
The approach outlined is phased: start with Rs 10 and Rs 20 notes, where durability gains are highest, instead of replacing all denominations. It also includes promoting domestic production of substrates under Atmanirbhar Bharat, a cost-benefit analysis weighing lifecycle and transition costs against environmental and security benefits, and recycling facilities.
Currency, coinage, legal tender and foreign exchange fall in the Union List (currency and coinage). The Reserve Bank of India Act, 1934 provides the legal framework for issuing and managing banknotes, and the RBI has the exclusive authority to issue them. The Government of India approves the design and material of banknotes on the recommendation of the RBI's Central Board and provides the sovereign guarantee for all RBI-issued notes.
With reference to the proposal for polymer banknotes in India, consider the following statements:
Which of the statements given above are correct?
Consider the following information:
| Item | Information | |
|---|---|---|
| 1. | BRBNMPL | Set up in 1995 under the Companies Act and headquartered in Bengaluru |
| 2. | Clean Note Policy | Announced by the RBI in 1999 to keep good-quality notes in circulation and withdraw soiled and mutilated ones |
| 3. | Salboni press | Operational since 1996 in West Bengal |
In how many of the above rows is the given information correctly matched?
Consider the following statements:
Statement-I: Polymer banknotes are being considered for Rs 10 and Rs 20 denominations first, rather than for all denominations.
Statement-II: Low denominations such as Rs 10 and Rs 20 deteriorate fastest because they circulate most often.
Which one of the following is correct in respect of the above statements?
